PSBs disburse Rs 3,892.78 Cr to clear pending dues of MSMEs
The Finance Ministry said that public sector banks (PSBs) have disbursed Rs 3,892.78 crore in the first two days of the month under the ECLG scheme.
The Finance Ministry on Wednesday said that public sector banks (PSBs) have disbursed Rs 3,892.78 crore in the first two days of the month under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus-induced lockdown.
Meanwhile, PSBs have also sanctioned loans worth Rs 10,361.75 crore under the 100 percent ECLGS starting
June 1.
The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month.
"Public sector banks have already sanctioned loans worth Rs 10,361.75 crore under the 100 percent Emergency Credit Line Guarantee Scheme. Out of this, Rs 3,892.78 crore has already been disbursed," Finance Minister Nirmala Sitharaman said in a tweet.
On May 21, the cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 percent through ECLGS for the MSME sector.
Under the scheme, 100 percent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers, in the form of a guaranteed emergency credit line (GECL) facility.
For this purpose, a corpus of Rs 41,600 crore was provided by the government spread over the current and the next three financial years.
The scheme would be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till an amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.
The main objective of the scheme is to provide an incentive to member lending institutions to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 percent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.
All MSME borrower accounts with an outstanding credit of up to Rs 25 crore as on February 29, which were less than or equal to 60 days past due as on that date, ie, regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 100 crore, would be eligible for GECL funding under the scheme.
Edited by Kanishk Singh